Sept. 3, 1998

Sue Vallone, Rental Manager
Nichols Ford
2401 East I-20 at Campus Drive
Ft. Worth, TX 76119

Dear Ms. Vallone:

This responds to your request for an interpretation whether your dealership may lease new Ford Super Club Wagons (seating a driver and 14 passengers) to schools to transport students to and from school-related events. As explained below, Federal law permits the lease of a new van to a school where it will be used to transport students on a one-time or very occasional basis, but not when the new van will be "used significantly" to transport students. It also permits the one-time rental of such a van to a school for a special event. Further, because States have the authority to regulate the use of vehicles, you should also contact Texas officials to see if there are State laws that apply.

Some background information would be helpful. The National Highway Traffic Safety Administration (NHTSA) is authorized to issue and enforce Federal motor vehicle safety standards applicable to new motor vehicles. Our statute (known until a few years ago as the "Vehicle Safety Act"), at 49 U.S.C. §30112, requires any person selling or leasing a new vehicle to sell or lease a vehicle that meets all applicable Federal safety standards. Accordingly, persons selling or leasing a new "school bus" must sell or lease a vehicle that meets the safety standards applicable to school buses.

Our statute defines a "school bus" as any vehicle that is designed for carrying 11 or more persons and which is likely to be "used significantly" to transport "preprimary, primary, and secondary" students to or from school or related events. 49 U.S.C. §30125. Accordingly, a 15-person van (such as the Ford Super Club Wagon) that is likely to be used significantly to transport students is a "school bus."

If the new 15-person van is sold or leased to transport pupils (e.g., leased on a regular or long-term basis to a school), the vehicle is a "school bus" and must meet NHTSA's school bus standards. Conventional 15-person vans do not have the safety features necessary for them to be certified as school buses. Therefore, a conventional 15-person van cannot be sold, or leased on a long term basis, as a new vehicle, to a school for pupil transportation.

On the other hand, a one-time rental of a new 15-person van to a school (e.g., for a special event) would be permitted. Because such use would not constitute "significant use" as a school vehicle, the van would not be a "school bus" and thus would not be required to meet the school bus safety standards.

You ask about a June 10, 1985 interpretation letter to Salem Quality Equipment, Inc. from NHTSA's then-Chief Counsel, Jeffrey R. Miller. You believe that the letter indicates that, when new buses are leased by a dealer directly to a school district, the buses need not meet school bus standards because there is no sales transaction involved.

We have carefully considered your suggested interpretation but cannot confirm it. The last paragraph of the letter states:

The term 'introduction in interstate commerce' . . . addressed those situations where a new bus is leased by a manufacturer, distributor or dealer directly to a school or school district. In those situations, there is no sales transaction involved. When a new bus is leased to a school or school district directly from its manufacturer, distributor or dealer, the Vehicle Safety Act requires that the bus must comply with the school bus safety standards.

This paragraph is explaining that NHTSA's school bus requirement applies to both sales and leases of new buses. In that letter, the agency explained that "NHTSA's [school bus] definition includes buses 'introduced in interstate commerce' in order to account for those situations where buses are leased to schools for transporting students." (Emphasis added.) That is, there need not be a sale involved for the school bus requirements to apply. If a new school bus is "introduced in interstate commerce," for example, by a lease arrangement, then the vehicle must meet the school bus standards.

You also asked about your legal obligations when selling a used bus to a school or school district. The requirement to sell or lease complying school buses applies only to new vehicles. If a school wishes to buy a used 15-person van or enter into a long-term lease, NHTSA would not require the seller or lessor to sell or lease a school bus. However, NHTSA believes that school buses are one of the safest forms of transportation in this country, and therefore strongly recommends that all buses that are used to transport school children be certified as meeting NHTSA's school bus safety standards. Further, using 15-person vans that do not meet the school bus standards to transport students could result in increased liability in the event of a crash. Since any potential liability your dealership may incur arising out of a sale or lease of a used vehicle would be determined by State law, you may wish to consult with an attorney and your insurance carrier for advice on this issue.

I hope this information is helpful. I have enclosed a question-and-answer sheet on "Dealer's Questions about Federal School Bus Safety Requirements." If you have any further questions, please feel free to contact Dorothy Nakama of my staff at this address or by telephone at (202) 366-2992.

Sincerely,


Frank Seales, Jr.
Chief Counsel
Enclosure
ref:VSA#571

d.9/3/98